February cattle closed slightly lower on the session yesterday as weakness in hogs and the negative impact of outside market forces were thought to have pressured the market. A rally in the Dollar and weakness in gold, energy markets and the US stock market were also seen as negative factors for the cattle market. Some traders feel there may have been enough volume of beef trade to help clear out the beef pipeline yesterday with a sharp break in beef prices. Lower prices might also entice better demand but will likely have a negative impact on the cash market this week. There is still no trade in the cash market this week, with bids at $118.00 and offers at $121.00-$125.00 as compared with cash trade at $124.00-$126.00 last week. Boxed beef cutout values were up 24 cents at mid-session yesterday and closed $4.44 lower at $186.45. This was down from $193.26 the prior week and is the lowest beef market since October 24th. February cattle are now trading at a stiff discount to last week's cash market so the market may be pricing in a significant drop in cash cattle into the first quarter. February cattle normally trade at about a $3.00-$4.00 premium to the cash market at this time of the year and are currently trading at a $5.00 discount. Weekly U.S. beef export sales for the week ending December 1st came in at 15,700 metric tonnes, compared with the prior 4-week average of 11,025 tonnes. Cumulative sales for 2011 have reached 825,500 metric tonnes, up 28.4% from last year's pace. The estimated cattle slaughter came in at 131,000 head yesterday. This brings the total for the week so far to 519,000 head, up from 515,000 head last week at this time but down from 523,000 head a year ago. Average dressed steer weights for the week ending November 26th came in at 856 pounds, up from 852 pounds the previous week and unchanged from a year ago. Beef production for the same week came in at 438.2 million pounds, down 3.57% over year ago.
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